Correlation Between Covalon Technologies and Fennec Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Covalon Technologies and Fennec Pharmaceuticals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Covalon Technologies and Fennec Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Covalon Technologies and Fennec Pharmaceuticals, you can compare the effects of market volatilities on Covalon Technologies and Fennec Pharmaceuticals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Covalon Technologies with a short position of Fennec Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Covalon Technologies and Fennec Pharmaceuticals.
Diversification Opportunities for Covalon Technologies and Fennec Pharmaceuticals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Covalon and Fennec is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Covalon Technologies and Fennec Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fennec Pharmaceuticals and Covalon Technologies is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Covalon Technologies are associated (or correlated) with Fennec Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fennec Pharmaceuticals has no effect on the direction of Covalon Technologies i.e., Covalon Technologies and Fennec Pharmaceuticals go up and down completely randomly.
Pair Corralation between Covalon Technologies and Fennec Pharmaceuticals
Assuming the 90 days horizon Covalon Technologies is expected to generate 3.89 times less return on investment than Fennec Pharmaceuticals. But when comparing it to its historical volatility, Covalon Technologies is 1.5 times less risky than Fennec Pharmaceuticals. It trades about 0.12 of its potential returns per unit of risk. Fennec Pharmaceuticals is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 436.00 in Fennec Pharmaceuticals on September 1, 2024 and sell it today you would earn a total of 170.00 from holding Fennec Pharmaceuticals or generate 38.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Covalon Technologies vs. Fennec Pharmaceuticals
Performance |
| Timeline |
| Covalon Technologies |
| Fennec Pharmaceuticals |
Covalon Technologies and Fennec Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Covalon Technologies and Fennec Pharmaceuticals
The main advantage of trading using opposite Covalon Technologies and Fennec Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Covalon Technologies position performs unexpectedly, Fennec Pharmaceuticals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fennec Pharmaceuticals will offset losses from the drop in Fennec Pharmaceuticals' long position.| Covalon Technologies vs. Biotron Limited | Covalon Technologies vs. biOasis Technologies | Covalon Technologies vs. Mosaic Immunoengineering | Covalon Technologies vs. Cellectis SA |
| Fennec Pharmaceuticals vs. Molecular Partners AG | Fennec Pharmaceuticals vs. MediciNova | Fennec Pharmaceuticals vs. Anebulo Pharmaceuticals | Fennec Pharmaceuticals vs. Champions Oncology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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